OPERATING SEGMENTS

12 Months Ended

Dec. 31, 2011

OPERATING SEGMENTS

4.           OPERATING SEGMENTS

We operate in two business segments: data center services and IP services. The data center services segment includes colocation services, which involves providing physical space within our data centers, as well as associated services such as redundant power, interconnection, environmental controls and security. The segment also includes hosting services in which customers own and manage their software applications and content, while we provide and maintain the hardware, operating system, data center infrastructure and interconnection.  The IP services segment includes our patented Performance IP™ service, XIP™ Acceleration-as-a-Service solution, CDN services and flow control platform (“FCP”) products.

The following table shows operating results for our business segments, along with reconciliations from segment profit to loss before income taxes and equity in (earnings) of equity-method investment:

	Year Ended December 31,
	2011			2010			2009
Revenues:
Data center services	$	133,453		$	128,200		$	130,711
IP services		111,175			115,964			125,548
Total revenues		244,628			244,164			256,259
Direct costs of network, sales and services, exclusive of depreciation and amortization:
Data center services		78,907			82,761			94,961
IP services		41,403			44,662			48,055
Total direct costs of network, sales and services, exclusive of depreciation and amortization		120,310			127,423			143,016
Segment profit:
Data center services		54,546			45,439			35,750
IP services		69,772			71,302			77,493
Total segment profit		124,318			116,741			113,243
Restructuring and impairments		2,833			1,411			54,698
Other operating expenses, including direct costs of customer support, depreciation and amortization		125,408			116,226			127,467
Loss from operations		(3,923	)		(896	)		(68,922	)
Non-operating expense		3,866			2,170			461
Loss before income taxes and equity in (earnings) of equity-method investment	$	(7,789	)	$	(3,066	)	$	(69,383	)

Total assets by segment are as follows (in thousands):

	December 31,
	2011		2010
Data center services	$	215,004	$	116,953
IP services		141,706		176,189
	$	356,710	$	293,142

For the years ended December 31, 2011, 2010 and 2009, revenues generated and long-lived assets located outside the U.S. were less than 10% of our total revenues and assets.

We present goodwill by segment in note 8, and as discussed in that note, we did not record an impairment charge during the years ended December 31, 2011 and 2010. However, we recorded the following impairment charges by segment during the year ended December 31, 2009 (in thousands):

	Data Center Services		IP Services		Total
Year Ended December 31, 2009:
Goodwill	$	13,665	$	37,848	$	51,513
Other intangible assets		—		4,134		4,134
	$	13,665	$	41,982	$	55,647